Williams, the top seed in Ohio, thrashed Stosur in Montreal but could not break the Australian's serve this time around as she posted a 7-6 (9-7) 7-6 (9-7) triumph.
Wimbledon finalists Petra Kvitova and Eugenie Bouchard continued their poor form since SW19, both recording losses.
Kvitova beat Bouchard for her second All England Club title in July but between them they have won one match of five since as they stumble into the US Open later in August.
World number four Kvitova, of the Czech Republic, was beaten by Ukraine's Elina Svitolina 6-2 7-6 (7-2) in their second-round affair in Cincinnati.
The third seed lost serve five times throughout, including the opening game of the match, as Svitolina took control early.
Kvitova jumped out to a 2-0 lead in the second set but then trailed 5-4 as Svitolina served for the match.
The pair would exchange three consecutive breaks, with Svitolina twice failing to serve it out, before the world number 39 won all four points on her serve in the tie-break to cause the upset.
Canada's Bouchard, the seventh seed at the WTA Premier hard-court tournament, was bundled out by in-form Russian Svetlana Kuznetsova.
Kuznetsova, a two-time major winner, won through 6-4 3-6 6-2, with Bouchard's losing streak extending to three matches.
Polish fourth seed Agnieszka Radwanska eased past Japan's Kurumi Nara 6-2 6-2, while German sixth seed Angelique Kerber had a surprisingly straightforward win over fellow lefty Ekaterina Makarova of Russia 6-4 6-1.
Serbian seeds Jelena Jankovic (eighth) and Ana Ivanovic (ninth) both advanced in straight sets, Jankovic downing German qualifier Annika Beck 6-1 7-6 (7-0), while Ivanovic thrashed American wildcard Christina McHale 6-4 6-0.
Italian 13th seed Flavia Pennetta dismissed American youngster and qualifier Taylor Townsend 6-4 6-3, while Spanish baseliner and 15th seed Carla Suarez Navarro beat French qualifier Pauline Parmentier 6-3 7-5.
Wimbledon semi-finalist Lucie Safarova continued her impressive form, the 16th seed comfortably surpassing Kazakh qualifier Zarina Diyas 6-4 6-2.
Germany's Sabine Lisicki ousted 14th seed Sara Errani of Italy 6-4 2-6 7-6 (7-2) in a near three-hour battle.
Anastasia Pavlyuchenkova accounted for Italian qualifier Karin Knapp 6-1 6-3, not before the Russian saved 11 of 13 break points faced.
American Sloane Stephens broke opponent Barbora Zahlavova Strycova's serve five times in succession from late in the first set, to run out a 7-5 6-1 winner over the Czech.